Sometimes, you may be faced with a serious emergency that requires a significant amount of money. In case you do not have any savings but own a car, then it can be your way out of such a situation. An auto title loan AZ provider can give you the money that you need with your car as collateral. Although this loan may not be equal to the car’s actual value, it can play a key role in helping you solve your financial problems. Here are some important features that you need to know about these loans.
High Interest Rates
Interest rates charged on title loans are usually higher than those of traditional bank loans. Furthermore, they usually vary from one lender to another one. Typically, you can pay from 30 to a whopping 600 percent interest on the loan. However, some lenders can offer you another loan at a subsidized rate to settle the first one.
Quick Approval
The process of applying of this loan is extremely simplified to the point that some companies allow you to apply for it over the internet. Approval can take about 30 minutes. Since it is an emergency loan, it is possible to have the cash within about an hour or two of the application.
Short Repayment Period
This is also a key feature of any auto title loan. Many lenders usually expect to have the money plus interest back within a few months if not one month. This is immensely supported by the fact that the money availed from this loan is not usually a lot. Therefore, anyone who has a steady income can settle it within 30 days. Failure to repay it within the agreed period can prompt the lender to seize your vehicle.
Lower than Car’s Worth
No auto title loan lender will ever give you a loan that is equal or more than the car’s value. This is usually a safety mechanism that lenders employ to avoid running into losses in case you fail to repay it. Therefore, always expect to get a loan that is below your car’s worth.
Before applying for a car title loan, ensure that you have considered all alternative avenues of getting cash. You should only take this loan if you are sure of repaying it to avoid losing your car for a very menial amount of money.
